Correlation Between AMN Healthcare and Laboratory
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Laboratory at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AMN Healthcare and Laboratory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMN Healthcare Services and Laboratory of, you can compare the effects of market volatilities on AMN Healthcare and Laboratory and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AMN Healthcare with a short position of Laboratory. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Laboratory.
Diversification Opportunities for AMN Healthcare and Laboratory
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMN and Laboratory is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Laboratory of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laboratory and AMN Healthcare is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AMN Healthcare Services are associated (or correlated) with Laboratory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laboratory has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Laboratory go up and down completely randomly.
Pair Corralation between AMN Healthcare and Laboratory
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Laboratory. In addition to that, AMN Healthcare is 3.19 times more volatile than Laboratory of. It trades about -0.04 of its total potential returns per unit of risk. Laboratory of is currently generating about -0.08 per unit of volatility. If you would invest 23,257 in Laboratory of on October 7, 2024 and sell it today you would lose (342.00) from holding Laboratory of or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Laboratory of
Performance |
| Timeline |
| AMN Healthcare Services |
| Laboratory |
AMN Healthcare and Laboratory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Laboratory
The main advantage of trading using opposite AMN Healthcare and Laboratory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Laboratory can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Laboratory will offset losses from the drop in Laboratory's long position.| AMN Healthcare vs. Option Care Health | AMN Healthcare vs. Addus HomeCare | AMN Healthcare vs. Acadia Healthcare | AMN Healthcare vs. Encompass Health Corp |
| Laboratory vs. Quest Diagnostics Incorporated | Laboratory vs. Waters | Laboratory vs. Universal Health Services | Laboratory vs. Humana Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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